European shares closed flat on Monday after gains in mining companies limited earlier losses, while French and German stocks mostly fell after worryingly weak economic data from China raised fears of a global recession.
China’s retail sales for April fell 11.1 percent, nearly double the expected rate of decline, while industrial production fell 2.9 percent, despite analysts’ expectations of a slight rise, which raised fears that the world’s second-largest economy will witness a contraction this quarter in The COVID-19 lockdown remained.
The pan-European Stoxx 600 index closed flat after recording its first gain in a week on Friday.
The German index fell 0.4% and French shares 0.2%, recovering some of its early losses, while Wall Street started trading lower.
“The global economy is going to have supply chain problems, and China is obviously important … and that’s really in an environment where Europe has a lot of inflation. So this (weakness in China) will have an impact,” said Tewe Mavisin, chief macro strategist at Rabo Bank. on the European economy.
“Rising prices will motivate central banks to reconsider policies, while raising interest rates, and this is not helpful if you want to stimulate economic growth,” he added.
Tight monetary policy and signs of more measures, lockdowns in China and the war between Russia and Ukraine have dampened sentiment this year, with the Stoxx 600 index down about 11 percent so far.
Shares of European mining companies rose 1.5 percent to limit losses in the main index as industrial metals prices rose.
Vodafone’s stock rose 1.9 percent after the UAE’s Etisalat bought a 9.8 percent stake in the company.
Valneva shares fell 19.1 percent after the French drug company said that an agreement with the European Commission related to a vaccine against Covid-19 may be canceled, and that the company may have to reconsider its financial policies.
French retailer Casino rose 4.8 percent after it launched an operation to sell its renewable energy unit Green Yellow. A report said that Total Energy and Engie were considering buying the unit, which is estimated to be worth 1.5 billion euros ($1.6 billion).
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